Budget Resolutions

Rachel Hopkins Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests.

After a decade of austerity, and in response to rising living costs, inflation and debt, our communities needed targeted economic support to ease the pressure, but that has not been forthcoming. Instead, workers will be asked to bear the burden of paying for the economic crisis through a rise in national insurance from next April, and through local authorities being forced by this Conservative Government to increase council tax to pay for vital local services, including social care.

Paul Johnson of the Institute for Fiscal Studies has said that the outlook for living standards is “actually awful”, with

“High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.

It is a matter of priorities—tax hikes for workers and tax cuts for banks. It is the Conservative party helping its friends in the City, at the expense of our communities and public services. Rising inflation will exacerbate the situation: economists have stated that inflation will average 4% and could go as high as 6%. With that in mind, public sector workers, who deliver important public services and who are taxpayers, urgently need answers on what the spending review’s pay announcement actually means in practice. After 11 years of sustained pay freezes and, in effect, pay cuts in the public sector, the Government could have committed themselves to a real-terms pay increase for public sector workers to address rising inflation and the cost of living. The announcement on public sector pay is a con. By failing to commit themselves to a real-terms increase and asserting that they do not want to “prejudge” independent pay review processes, the Government caused their announcement to lose all legitimacy.

This Government have a track record of completely ignoring pay review body recommendations. Let us look at the prison officers’ situation. Last year’s recommendations from the Prison Service Pay Review Body included a £3,000 pay rise for band 3 officers on the new contracts. The Government rejected the experts’ advice, stating that it was unaffordable. That leads to the other issue: the Government do provide indicative advice on the overall remit of pay review bodies. This is all just smoke and mirrors, as it is not a case of prejudging: nothing is stopping the Government from advising that a real-terms increase for public sector workers is appropriate.

We also need to hear more from the Government on civil service pay. The hundreds of thousands of civil servants do not have a pay review body, and rely on the Treasury to determine a pay rise; but, as we all know, when it comes to a spending review the devil is always in the detail. In this case, the autumn spending review confirms cuts

“of 5% against day-to-day central departmental budgets in 2024-25.”

The Public and Commercial Services Union has expressed concern about the suggestion in the spending review that the Government want to cut

“non-frontline civil service headcount to 2019-20 levels by 2024-25”,

saying that that could mean about 32,000 jobs being cut.

Will the Minister tell us in his closing remarks how many civil service jobs are expected to be cut as Departments are forced to make 5% savings, and whether the cut in running costs and jobs will in part be used to cover any public sector pay increase? Cutting the jobs of the civil servants who work, live and spend in our communities, such as those in Luton South who work for the Department for Work and Pensions, Her Majesty’s Courts and Tribunals Service and Border Force, will hamper any meaningful strategy to improve economic growth and living standards.

The Government need to change their priorities and root the recovery in our communities and workers’ prosperity. Lifting public sector workers’ living standards will have a positive knock-on benefit, contributing to the distribution of growth across all our communities and the country. It is time to change tack, and back our public sector workers to back our economic recovery.